Your weekly travel and aviation Quote-a

28 October, 2022

At a time of crisis, it is important that we share our insights and experience, helping each other to contain and mitigate the impact of COVID-19. CTC – Corporate Travel Community each week brings you a roundup of the most thought-provoking and interesting comments from those industry leaders in the know.

Air New Zealand CEO and chair: 'it's clear the climate crisis is continuing to accelerate rapidly'

Air New Zealand chair Therese Walsh and CEO Greg Foran stated "As the world reopens, it's clear the climate crisis is continuing to accelerate rapidly", adding "We are acutely aware that in order to continue to connect Kiwis to the world and the world to us, we must work hard to reach net zero carbon emissions by 2050". Dame Therese and Mr Foran said the bounce back of travel is "much quicker than anticipated", however, "we're leaning into the challenges we face as we seek to take genuine action on climate change… we're dependent on our connections to the world, and we must find a more sustainable way to fly if we want to ensure our tourism and export industries continue to thrive".

Auckland Airport chair: 'aviation is on the path to recovery now'

Auckland International Airport chair Patrick Strange stated "When we wrote to shareholders a couple of months ago in our annual report, Auckland Airport's recovery was ramping up… since then planes and travellers have continued to return", adding "The place is starting to buzz again". Mr Strange said: "There remains much hard work still to be done, but aviation is on the path to recovery now".

Brisbane Airport CEO: Passengers in 2032 will travel 'through a completely new state-of-the-art' airport

Brisbane Airport CEO Gert-Jan de Graaff said ahead of the 2032 Olympic and Paralympic Games, "My biggest prediction is that, when passengers travel… they will be travelling through a completely new state-of-the-art Brisbane Airport". Mr de Graaff said new additions include "net zero, or even climate positive Scope 1 and 2, with new mass transport solutions to and from each terminal", with new security systems currently being launched at the facility.

United Airlines CEO: ULCC business model is 'doomed'

United Airlines CEO Scott Kirby stated the ULCC business model is "doomed" as airlines are no longer able to grow at rates of 15% to 20% annually. Mr Kirby explained the ULCC business model is predicated on the mentioned growth rates, in addition to ancillary fees including baggage and meals. Mr Kirby noted this is "a real advantage" for United.

Ryanair Group CEO: Recession and inflation 'very good for our growth'

Ryanair Group CEO Michael O'Leary said "we think recession, price inflation is very good for our growth". Mr O'Leary added: "In a recession people become more price sensitive. They shop in Lidl and Aldi, they spend more on furniture in Ikea and when they want to fly, they fly with Ryanair".

Alaska Air Group business travel revenue recovered to 80% of pre-pandemic levels: CEO

Alaska Air Group CEO Ben Minicucci reported business travel volumes have recovered to 75% to 80% of pre-pandemic levels, while business revenue is hovering at 85% to 90% of 2019 levels. Mr Minicucci noted corporate travel is recovering slower across the West Coast, however the carrier is set to benefit from remote working and hybrid travel. Mr Minicucci expressed his belief that the carrier can restore 100% of pre-pandemic business travel revenue.

AAPA: International passenger demand maintains 'strong upward momentum' in Sep-2022

Association of Asia Pacific Airlines (AAPA) reported international passenger demand "sustained its strong upward momentum despite a worsening global economic outlook" in Sep-2022. AAPA director general Subhas Menon commented: "Asian airlines are seeing encouraging recovery in international travel demand and achieving load factors close to pre-pandemic levels". He added: "The region's airlines continue to face a challenging operating environment, with operating costs under pressure as a result of high fuel prices and weak local currencies".

Southwest Airlines expects 1Q2023 capacity to increase approximately 10%: CEO

Southwest Airlines CEO Bob Jordan stated the airline extended its flight schedule "through 10-Jul-2023, and we currently expect first quarter 2023 capacity to increase approximately 10% and second quarter 2023 capacity to increase approximately 14%, both year-over-year". Mr Jordan said: "We are building our 2023 capacity plan with a goal to have sufficient aircraft to operate our 2023 flight schedules, as originally published, in an effort to enhance operational reliability", with plans to allocate "the vast majority of new 2023 capacity to network restoration and stronghold Southwest markets, which we consider to be lower-risk growth". The carrier expects by summer 2023, its network will be 90% restored based on 2019 levels, and completely restored by Dec-2023.

Virgin Australia 'very focused on our 737 aircraft footprint': CEO

Virgin Australia CEO Jayne Hrdlicka said the carrier is "very focused on our 737 aircraft footprint", adding "The total market demand right now feels about what it should be if the music hadn't stopped". Ms Hrdlicka said leisure demand will "remain very strong", with "Small and medium-sized business is back well over where it was in 2019", however, with larger businesses, "the amount of money that is being spent is there", with a fewer trips.

Delta Air Lines CEO: Europe 'our strongest region' amid USD strength

Delta Air Lines CEO Ed Bastian stated Europe is "probably our strongest region, even stronger than our domestic demand". Mr Bastian noted the current strength of the US dollar provides Americans travelling to Europe "a bargain with currencies", adding international points of sale currently account for less than 10% of Delta's total revenue.

Allegiant Air CFO: Demand 'remained strong' in 3Q2022

Allegiant Air CFO Gregory Anderson stated "We ended the quarter with adjusted earnings, excluding 2022 employee recognition bonus in-line with our updated guidance". Mr Anderson said demand "remained strong" throughout 3Q2022 "with strength continuing into the upcoming holiday season", adding "Third quarter loads were more than 88%, 2.5pp higher than the third quarter of 2019, on 17% more capacity".

Lufthansa CEO says group has left the crisis behind

Lufthansa Group CEO Carsten Spohr stated the group demonstrated in Sep-2022 that it has "left the crisis mode behind". Mr Spohr said 99% of flights are operating regularly again, with 70% on time, while 80% of its 2019 passengers are back on board.

Frontier Airlines achieves 'another record quarter' of ancillary revenue per passenger in 3Q2022:CEO

Frontier Airlines CEO Barry Biffle reported "we achieved another record quarter of USD78 of ancillary revenue per passenger" in 3Q2022. Mr Biddle added: "Leisure demand has structurally changed with customers having more flexibility and a desire to travel more often…Frontier is positioned to capture a disproportionate share of the growing leisure segment as America's ultra-low-cost carrier".

Qantas Group CEO suggests domestic and international terminal merger for Sydney

Qantas Group CEO Alan Joyce suggested a merge between Sydney Kingsford Smith Airport's domestic and international terminals, highlighting a "potential plan we would like the airport to work towards". Mr Joyce said there is potential to expand in the domestic area of the airport, noting "there is a whole series of hangars and land where they could expand into and create a new Qantas international terminal for Qantas and its partners".

Spirit Airlines 'performed well against a set of negative headwinds' in 3Q2022

Spirit Airlines CEO and president Ted Christie stated "The business performed well against a set of negative headwinds during the third quarter 2022, including much higher fuel costs, Hurricane Ian, and Florida capacity constraints". Mr Christie said: "Strong demand and sound revenue management coupled with excellent operational reliability and overall cost management" mitigated headwind impacts, however, there is "still much work to do to return to full utilisation and normalised margins, but we remain confident we can reach both of those targets by mid-year 2023". Mr Christie said in 4Q2022, there are expectations for unit revenue to be "up 15.0% to 16.5% on 24.5% more capacity, compared to the fourth quarter 2019".

Viva Aerobus CEO: Delays in aircraft deliveries impacted operations in 3Q2022

Viva Aerobus CEO Juan Carlos Zuazua said delays in the delivery of aircraft and spare engines by Airbus and Pratt & Whitney "significantly impacted" the airline's ability to operate efficiently in 3Q2022, forcing the carrier to reduce its summer 2022 capacity by over 16%. The airline handled 5.5 million passengers in 3Q2022, up 29.7% year on year and 63.4% higher than 3Q2019, with an average load factor of 86.5%. As previously reported by CAPA, Viva Aerobus added two A320s and two A321s to its fleet in 3Q2022.